Consolidating business debts with a merchant cash advance
Small businesses need extra cash to grow and expand, but repayments can sometimes be difficult to manage, depending on the terms and timescales. If you’re currently managing a few debts, consolidating them can make repayments cheaper and clear debts faster.
The Merchant Cash Advance is a simple business finance solution with manageable repayments. Here’s how you can use it to consolidate your existing debts.
- What is a Merchant Cash Advance?
- Consolidating debt with a Merchant Cash Advance
- How can your small business qualify?
- Managing business debt as a sole trader
- Managing business debt as a limited company or partnership
- Raise £3,500 to over £500,000
What is a Merchant Cash Advance?
A Merchant Cash Advance adapts to your business’ changing cash flow, keeping repayments affordable.
You can raise from £3,500 to over £500,000 for your small business. A small percentage of your credit and debit card takings will be paid towards your repayments. If you have a slow day, you won’t pay back much. On a busy day, you’ll repay slightly more.
Consolidating debt with a Merchant Cash Advance
Lenders will always ask if you have any current outstanding Merchant Cash Advances before they lend to you. Capify advises against taking out more than two Merchant Cash Advances.
If you have one Merchant Cash Advance pending, you can often refinance your existing Merchant Cash Advance with another provider. This can free up cash flow and make repayments easier.
How can your small business qualify?
Before you can take out finance, we’ll review your credit score, any outstanding finance, and your business’ general performance and profitability.
To be eligible you’ll need to:
- Run a UK-based business either as a sole trader, in partnership, or as a limited company
- Take at least £3,500 per month in card payments
- Have at least 6 months’ trading records
Your Capify account manager will also discuss how affordable your current Merchant Cash Advance agreement is, and if consolidation is going to make things easier or not.
Managing business debt as a sole trader
Sole traders have a different business formation to a limited company. A sole trader is their business, so they’re personally responsible for their business’ finances, including debts. Any debt agreement you sign will be down to you to repay, not just your business.
For this reason, a sole trader’s Merchant Cash Advance agreement is slightly different to a limited company’s. Capify’s account managers will be able to talk you through the terms and conditions and advise you how repayments work.
Managing business debt as a limited company or partnership
The company director isn’t personally responsible for a limited company or LLP’s debts. Your Merchant Cash Advance belongs to the business.
If you want to consolidate your limited company’s existing debts with a Merchant Cash Advance, our account managers can talk you through the process.
Raise £3,500 to over £500,000
You could raise £3,500+ for your small business with the Merchant Cash Advance, depending on your average monthly turnover. If your existing debts are too expensive, or have become tricky to manage, this is a more predictable, manageable way to repay.
The Merchant Cash Advance is super flexible. The regular repayments will work with your cash flow, not against it. You only make payments when money comes into your business, so you know you can comfortably afford it.
Find out how much you can raise with a quick quote.
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